3 Phases of Managing a Business Through a Crisis Brian J. Sharkey, Director-in-Charge, Business Advisory Robert. S. Olszewski, Director, Audit & Accounting www.kmco.com
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3 Phases of Managing a Business Through a Crisis • PHASE 1 | SURVIVE Maintain a viable business and energy levels during a 1 to 3 month period of heavy disruption to markets and customer base. • PHASE 2 | PIVOT AND ADAPT Use disruptive period as a unique opportunity to assess past practices and processes, explore innovation and change, design pivot strategies, adapt business delivery models and develop new products or services for an evolving marketplace. • PHASE 3 | THRIVE Be on your front foot as the market returns, slowly in some areas and rapidly in others. Be ready for improved capabilities, evolved products or services and align marketing to emerging targeted customer needs. www.kmco.com 2
Phase 1 | Survive SCENARIOS ACTIONS ALL SCENARIOS - keep calm, strategic and in regular communication with your team, suppliers, advisors, and customers - explore government programs and incentives that are available to the business - have a disaster scenario plan in place based on your circumstances for business continuity create a core group for a daily “war room” discussion on priorities, strategies and actions - - embrace technologies for all forms of communication - have a clear 30-day plan for the business that is routinely reviewed and adapted as required - monitor stress levels and mindset for all and take time away for mental health and fitness BUSY - assess operational capacity to ensure you can accommodate demand fluctuations - review risk mitigation strategies as demand fluctuates and health concerns in all business areas - review recruitment options while maintaining core values and corporate mission - Create a daily rhythm to manage the team and communicate priorities remotely or safely in person LOW IMPACT - regular review of market trends to update disaster scenarios - determine how team members can be repurposed to help in other areas or work on future planned projects - review risk mitigation strategies as demand fluctuates and health concerns need to be addressed - assess how costs can be reduced and identify inefficiencies HIGH IMPACT - develop a cost reduction to hibernate core parts of the business during brief period of disruption - determine key leaders and resources required to plan for recovery - schedule professional development to be undertaken during the down period RESOURCES - 13 week cash flow - issue ranking diagnostic - time management - disaster scenario planning - decision matrix - risk mitigation www.kmco.com 3
Phase 2 | Pivot & Adapt SCENARIOS ACTIONS ALL SCENARIOS - list out things you have observed in processes and procedures that may be waste (old habits) - perfection is the enemy action; get comfortable being 80% correct to avoid lack of decision or action - review your business mission statement and mission; has anything changed due to the crisis - assess the opportunities to pivot into new growth markets or new products/services offerings - evaluate innovation and technology platforms you can fast track or bring forward in your planning - examine opportunities for improvement in your organizational structure - consider the talent pool available based on the levels of unemployment (potential upgrades) - have a clear 30-day plan for the business that is routinely reviewed and adapted as required BUSY - explore using excess funds gained during this time to fund new opportunities and innovation - consider your primary product or service with accessories in an evolved market - review the team to look for future leaders discovered through this crisis LOW IMPACT - construct strategic plan on recovering lost business - assess additional products and services that will be required by your customers - consider accelerating future leaders discovered through the crisis - explore pricing discounts and incentives with vendors HIGH IMPACT - develop a plan focused on returning as a leaner, evolved business post crisis - understand opportunities to make major changes to the way you do business and the people it requires - Review potential market trends post crisis and prioritize changes to operational structure - invest time on enhance professional development; focus on high value to others RESOURCES - 26 week cash flow - waste reduction diagnostic - change success formula - product portfolio analysis - strategic SWOT analysis - competitor analysis www.kmco.com 4
Phase 3 | Thrive SCENARIOS ACTIONS ALL SCENARIOS - leverage what you learned through the crisis to develop new strategies - prioritize initiatives to be completed to maximize the probability of change success - clearly define your businesses strategic competitive advantage - develop highly targeted marketing activities - formalize sales and growth plan to recapture lost business and capture product surround - attract new talent levels that are available in the marketplace (upgrade) BUSY - run rapid problem solving meetings to address challenges or opportunities - brainstorm on potential drop off in demand as the crisis abates - capitalize on strengths built during this period to attract new customers (use war stories) - review the team to look for future leaders discovered through this crisis LOW IMPACT - manage to priorities and be laser focused - reconnect with lost customer segments that were impacted during the crisis - implement leadership development program of identified emerging and future leaders HIGH IMPACT - manage to priorities and be laser focused - reconnect with lost customer segments that were lost during the crisis - recruitment of new team members for the business - conduct workforce planning within a new business model RESOURCES - 52 week cash flow - must-should-could - change success formula - time management diagnostic - pareto analysis - issue ranking diagnostic www.kmco.com 5
Key Resources Available to You • Cash Flow Projections • Change Success Formula • Competitor Analysis • Issue Ranking Diagnostic • One Page Accountability Plan • Pareto Analysis • Product Portfolio Analysis • Time Management Diagnostic • Waste Reduction Diagnostic www.kmco.com 6
Feedback Received From Our Relationships • Adapting to a New Working Environment | Motivating Employees • Forecasting Cash Flows and Working Capital • Government Programs and Financial Relief • Layoffs versus Furloughs | Protecting Employees • Loan Forgiveness Computations • Managing Through Uncertainty | Returning to Normal www.kmco.com 7
Contact the Presenters: kmiller@kmco.com Brian J. Sharkey, CPA, CVA, CEPA Director-in-Charge, Business Advisory Robert S. Olszewski, CPA, AMFS Director, Audit & Accounting www.kmco.com 8
Thank you for your participation! www.kmco.com 9
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